In Critical Questions 2013 CSIS's world class experts give their take on what they see as the most pressing challenges facing the world in 2013. Transitions in U.S. defense policy, regional flashpoints, and global-scale issues are likely to dominate what will be another year of international transformation.

Q1: What is the future of the “Reset” with Russia for Obama’s next term?

A1: Zero. Nothing. The “Reset” is dead as a doornail. In retrospect I would date its demise to September 24, 2011, when at the United Russia Party Congress it was revealed that Vladimir Putin and Dmitry Medvedev, the so-called tandem, would switch places with Putin again becoming president of Russia. It was precisely at this time that U.S.-Russia relations took a decided turn for the worse with the first of Russia’s double vetoes (with China) on UN sanctions on Syria in early October. Kremlin criticism of the United States multiplied and became much sharper as the fall progressed on issues including Syria, missile defense, Iran, and others.

Note that, as far as I am aware, Putin never used the term “Reset” (perezagruska), neither when he was prime minister nor when he again became president in May. For him this term applies to the Obama/Medvedev years. It is not that he did not support agreements and cooperation that emerged in 2009–2011, but I suspect he always believed that the Obama administration’s strategy with the Reset in part was to try to strengthen Medvedev’s domestic political standing at home through foreign policy achievements with the United States. And while we do not know the decisionmaking progress during the tandem years, I think that Putin and Medvedev genuinely disagreed over Libya and the eventual Russian decision to abstain from the UN Security Council resolution that allowed NATO intervention in the spring of 2011. Many observers tossed that off as a good cop/bad cop routine, but I believe it reflected real differences on a pivotal issue given what happened in Libya, as virtually all of the Russian ruling elite now views the abstention as a serious blunder (as do the Chinese) that would not be repeated in Syria.

The year 2012 was rather brutal for U.S.-Russia relations. It began with the unprecedented harassment of our newly appointed ambassador to Russia, Michael McFaul, who has often been referred to as the architect of the Reset. This was part and parcel of the presidential campaign of Putin, which featured blatant and virulent anti-Americanism as a central plank. Putin then stiffed President Obama in refusing to come to Washington in the spring for the G-8 and gave the totally uncredible excuse that he was too busy to travel because of political demands at home in his cabinet formation. Then in the fall, the Russians expelled the U.S. Agency for International Development and discontinued the Cooperative Threat Reduction Program (Nunn-Lugar), which that had probably been the most successful U.S. collaborative assistance effort since the Marshall Plan. The year ended on a total downer with the Russian Duma’s bizarre response to the U.S. Congress’s passing of the Magnitsky Act (which accompanied Russia being granted permanent normal trade relations status)—the Dima Yakovlev Act (which prohibited as of January 1 Americans from adopting Russian orphans). The Russian government promised an asymmetric response to the Magnitsky Act, but they really outdid themselves by passing legislation whose primary effect is to punish especially older and disabled Russian orphans that Russians themselves are not inclined to adopt. Any happiness in Moscow and Washington about finally getting rid of the dreadfully anachronistic Jackson-Vanik amendment was overwhelmed with the tit-for-tat Magnitsky and Dima Yakovlev legislation.

Q2: Okay, so if the Reset is over, how would you characterize the challenges and opportunities for the Obama administration in the year ahead with Russia?

A2: The only good news is that the relationship is not as bad as it was in January 2009 when Obama first came to power. The bad news is that is still a very low bar, and there are not any near-term prospects or major incentives to improve relations as there were four years ago. In 2009, the Obama team believed they needed to work with the Russians first to address the Iran nuclear threat, second to support a greater military footprint in Afghanistan, and third to advance the newly elected president’s new vision for nuclear security. Iran is much closer to gaining a nuclear capability, but however the issue is resolved, there is not as much need to engage Russia as four years ago. Afghanistan is now a “sell” rather than a “buy” issue for the administration, and while we need Russian support for our withdrawal and efforts to stabilize the region, this is not as high of a priority for the Obama team today. Obama has not given up on his “global zero” nuclear agenda, but its prominence has faded, and the prospects of another bilateral round of deep cuts in offensive nuclear forces with Russia will be impossible without reaching some kind of agreement on missile defense, which would require compromises from Washington and Moscow that appear at least for now to be unworkable.

Obama expended considerable time and political capitаl in working with Dmitry Medvedev in the first years of his term, and he was rewarded with important agreements and cooperation on Iran, nuclear cuts, Afghanistan, and other issues. There is nothing, however, that Vladimir Putin has said or done in the past year or so to give the U.S. president any confidence that investing his precious time and capital would bring anything close to the returns he got in the heyday of the “Reset.” Obama is a pragmatic guy, and I cannot imagine he has any serious enthusiasm in taking up Putin on his invitation to come to Moscow later this spring. For what? What prospect is there of any “deliverables” that are worth the effort? I would love to be wrong, but I do not see them in the offing.

This may be a better time for officials and thought leaders to take a step back and make the effort to envision how each country can be important in the longer term in achieving economic and national security goals. Where should Russia fit in U.S. global strategy in the years ahead? There is a lot of dynamic change now in international relations including obvious developments like the rise of China, the growing impact of climate change, and the shale gas revolution. It does not take a genius to envision how Russia could play a constructive role from the standpoint of Washington and vice versa of the United States for Moscow on East Asian security, the development of the Arctic, global energy security, the growing role of political Islam, and a host of other major challenges. There also is significant untapped potential in bilateral commercial relations stemming in part from Russia’s membership in the World Trade Organization but more broadly as it continues to integrate into the global economy and finally unshackle itself from the tremendous burden of the Soviet economic legacy.

Q3: Is Putin really going to rule Russia for two more six-year terms—until 2024?

A3: I doubt it, but he certainly is in no imminent political danger, at least as long as the oil price does not fall much below $80/barrel. However, the challenges he faces in guiding Russia to its next stage of development are considerable. He is popular, maybe not so much as a few years ago, because he has presided over an unprecedented and remarkable period of economic growth and increased prosperity in Russia. But with that growing prosperity has emerged a genuine middle class with greater demands for pluralism, good governance, and a voice in how public affairs are managed.

If Putin and his team are not able to deliver more sustained dynamic economic growth, his ratings and political popularity will continue to fall. But the key drivers of economic growth for much of his tenure—dramatically rising oil prices, increased oil production, and easy monetary conditions—will hardly coalesce to the degree they did from 1999 to 2008, fueling a very much unexpected Russian boom. In 2006, I wrote an article entitled “Vladimir the Lucky” arguing that Putin was leader of Russia during a remarkable period of fortuitous, mainly external circumstances over which he had no control. But now it appears that his luck is running out as, for example, the shale gas revolution has decidedly had and will likely to continue to have a negative impact on one of Russia’s main sources of export revenue, natural gas. It would appear that Putin’s only real option is to return to a reform agenda that will bring greater efficiencies to the Russian economy. This calls for better governance and transparency to combat endemic corruption. The risk, however, is that making these efforts will attack the foundation of his system, the “vertical of power” as the Russians call it. One has to think long and hard of another historical leader who led his polity building one system for more than a decade and then pivoted to destroy that edifice in a second decade. So the task is not impossible, but probably not a good wager.